How to start a retail jewellery business in India

Jewellery has been an integral part of human civilization. Some people wear Jewellery at auspicious occasions like marriages, engagements, etc as it’s a symbol of power and prestige and others worn to deliver style statement and be fashionable.

In this article we will be discussing how to register a retail jewellery business name in India, how to obtain business license, setting up a separate bank account, and more.

Before getting into registration and license part, we suggest you to choose the right name according to your line of business. For example, if you have decided to go for silver jewellery only then you can name your business as “Silver Palace”. But if few months later, you have decided to sell gold items then “sliver palace” will not suit your business. In such type of situation, either you have to change your name or create a separate entity for the gold business. Creating separate entity or change in name will create lots of legal formalities and problems.

For this reason, we suggest you to choose your business name wisely before starting your retail jewellery shop. You also need to make sure your desired name is not already taken.

If you want to run your own web site with or without e-commerce capabilities then check and see if the name is available as a domain name.

Retail Jewellery business registration

For physical shop, you need to get your business registered under the Shop and Establishment Act.

If your per year turnover crossed 5, 00,000 rupees then VAT or CST (between the states) registration must be done with your local sales tax office.

Sale tax number is required for those who are selling retail jewellery. It can be obtained by contacting your department of revenue sales tax division. This number also permits jewellery businesses to buy jewellery at wholesale prices without paying sales taxes.

Once VAT registration is obtained, monthly or quarterly VAT returns as applicable must be filed by the business on time to avoid penalties.

Bank Account in the name of your jewellery business

To organize your financial records separately you need to open a separate bank account for your jewellery business. This helps in getting cash credit or loans from bank or financial institutions.

Before getting your sales tax registration, you must have to open a bank account with any private or PSU banks, as bank statement of your business is a mandatory document to get registered with sales tax department.

You can start a retail jewellery shop as a proprietor or partnership firm or private limited company or LLP. Business structure depends on the size of your business. You can also start as a proprietor or partnership firm and then convert it to private limited at a later point of time once business turnover shows improvement.

Permanent Account Number or PAN

If you have started as a proprietor then no need to apply for a separate PAN card in the name of your business. Other than proprietorship business, requires a separate PAN card in the name of business.

For example, if you have started a private limited company or partnership business in the name of Silver Palace private limited or Silver Palace respectively then in both the cases, you need to get your tax registration number or PAN from tax department.

BIS License for Selling Hallmark Jewellery

A jeweller who wishes to sell hallmarked jewellery must obtain a license from Bureau of Indian Standards (BIS) for the particular retail outlet. Each BIS license to sell hallmark jewellery is given for a particular retail premises or sales outlet. Therefore, one company that has multiple outlets must obtain multiple BIS License to sell hallmark jewellery.

Based on the state where you want to set up your shop, you may require getting professional tax registration. For this we request you to check your state professional tax requirements.

If you are putting a bigger set up then you may also require to have TAN. TAN or Tax deduction and collection Account Number is required when as per tax law you are liable to deduct tax before making payment to payer.